Getting bang for tourism buck

The realignment of tourism spending proposed by Gov. Gina M. Raimondo is intended to create a coordinated, statewide focus on attracting visitors to Rhode Island.

It’s an idea long advocated by state tourism and economic-development officials but resisted by leaders of the state’s regional tourism councils for fear it would lead to their demise.

Raimondo’s plan centers on redistributing the state’s hotel tax, pulling resources from some of those six active regional tourism councils. Predictably, several are preparing to fight the governor’s proposal.

“It was a surprise and it’s difficult for me to understand,” said South County Tourism Council President Myrna George of the proposal. She argues that her organization, which represents 11 communities, has had several years of increased returns for the state, in terms of hotel bookings and tax revenue. Under the proposed redistribution, only Discover Newport will retain its existing funding formula, sharing 21 percent of the hotel tax collected in its member communities with the state. All other tourism councils, most heavily those for Block Island, South County and the Blackstone Valley, will direct more hotel tax revenue to the state, and specifically the R.I. Commerce Corporation.

- Advertisement -

The proposed formula would require Block Island, South County and the Blackstone Valley tourism councils to direct 43 percent of the hotel tax in their respective areas to the state. The state’s tax is 6 percent, on hotel-room charges, although 1 percent is automatically returned to the community hosting the hotel.

If authorized by the General Assembly, the redistribution would help provide about $4 million for a coordinated, statewide marketing campaign for tourism, beginning in the fiscal year that starts in July. For the first time since 1996, the funds would not go to the state’s general fund, but instead would head directly to Commerce RI for use in tourism promotion and marketing.

Robert Billington, Blackstone Valley Tourism Council president, said he had “no notion” a new funding formula was in the budget until he started looking through the documents. The district collected $363,000 this year from the hotel tax, he said. He expects to lose $200,000 of that under the proposal.

“We realized we were going to be decimated,” he said.

But should it have been a surprise?

As recently as December 2014, a report commissioned by Commerce RI warned that the state’s declining market share in tourism last year alone cost it nearly $1.8 billion in visitor spending.

Rhode Island is getting outspent by other states in tourism and it needs a cohesive, statewide branding effort, says newly appointed Commerce Secretary Stefan Pryor. The Newport and Providence regions, he told Providence Business News, were seen as playing a particularly important role. In order to succeed, the state has to look “beyond an approach that engages in a fractionalized” set of campaigns, he said.

In proposing the change, Raimondo noted the state spent just $463,000 this year on tourism promotion, compared with $3.1 million for Vermont, $12.7 million for Connecticut and $15.9 million for Massachusetts. •

No posts to display